CHAPTER FIVE
Goal Alignment
Reducing Perverse Incentive Misalignment
You can study the latest retailing methods. You can buy the best IT. But if you haven’t aligned the incentives of everyone within your company and supply chain, you will not succeed at rocket science retailing.1
Consider the impact of incentives within a single retail department: distribution. Distribution and logistics departments’ staffers are commonly evaluated on how efficiently they move merchandise through the supply chain. When we worked with a fashion apparel retailer, its distribution manager shared with us a video that he’d created on ways to improve distribution efficiency. It showed that warehouse workers could pick orders more quickly if all stores ordered the ...
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